Seoul, Jan. 26 (Korea Bizwire) – South Korea’s big name firms Samsung Electronics Co. and Hyundai Motor Co. have decided not to run commercials during this year’s Super Bowl, company officials said Monday, following their earnings slump in the previous year.
Samsung Electronics, the world’s largest handset maker, will not be returning to the television screens for the second consecutive year, giving up a chance to advertise in front of more than 100 million potential viewers tuning in to the largest sports event in the United States.
The same goes for Hyundai Motor, South Korea’s top carmaker, which had not missed out on promoting its vehicles for the past eight Super Bowl seasons since 2008.
The decisions follows the firms’ unsatisfactory bottoms lines.
Tech behemoth Samsung Electronics saw its third-quarter net profit plunge to a three-year low last year on waning sales of its flagship smartphones. Earnings for the whole of 2014, to be announced later this week, is expected to fall by more than one fourth on-year, according to forecasts by local brokerages.
Similarly, Hyundai Motor logged a 14.9 percent-drop in annual net profits, which came to 7.65 trillion won (US$7.08 billion) last year, hit by unfavorable currency market conditions, turmoil in one of its bigger market Russia and intensified competition from foreign rivals.
Considering the downfall in earnings, coupled with the fact that a 30-second spot for a commercial during last year’s Super Bowl cost firms around $4 million, industry watchers suspect the companies may be cutting down expenses.
“The huge advertising costs might be a burden when these firms are currently struggling from last year’s weak earnings,” an industry official said.
Hyundai’s smaller affiliate Kia Motors Corp., meanwhile, has purchased a 60-second spot for this year’s Super Bowl, which will mark its sixth appearance on the annual U.S. National Football League championship in a row to promote its revamped Sorento sport utility vehicle, according to company officials.